Purchasing Managers Say Michigan Economy Showing Sustained Growth
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The Southeast Michigan Purchasing Managers Index is up for the eighth straight month, providing a score of 67.1 in October. The rising index suggests a slightly stronger economic growth compared to September’s score of 65.
According to the monthly survey of purchasing managers compiled by the Wayne State University School of Business Administration and the Southeast Michigan chapter of the Institute for Supply Management, metro Detroit’s economy is displaying signs of sustained improvement.
Index values above 50 generally represent an expanding economy, with the growth rate accelerating as the index rises above 50.
Strong improvements in production and new orders triggered growth in October. The employment index showed solid progress at 65.8, slightly slower than September.
According to Timothy Butler, associate professor of global supply chain management at Wayne State’s business school, finished goods inventories declined from September but still showed some growth.
Nationally, there has been concern about increasing inventories and their implications for the economic recovery.
“Unlike growth in production, new orders and employment, inventory growth is a negative indicator for the economy because it suggests businesses are not moving goods quickly enough,” Butler said.
However, most local purchasing managers had a positive outlook for the near future, 87 percent saying they expect the business environment to stay the same or become more stable in the next six months.
Similar indexes around the country and world also experienced growth, though at varying rates. Chicago’s PMI was 59.5, down slightly from September, as was the Eurozone PMI at 53.4. The national Institute for Supply Management Manufacturing PMI increased to 56.9 and the China PMI increased to 54.7.
Download the complete October Southeast Michigan Purchasing Managers Index report at www.ism-sem.org/uploaded_pics/pdf-20101103102657.pdf. For an archive of past reports going back to 2004, visit www.ism-sem.org/cat/Additional+Links-9.html?49.
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